UPDATE: Brean Capital Initiates Coverage On GrubHub

Brean Capital initiated coverage on GrubHub Inc GRUB with a Hold rating.

Analyst Tom Forte noted that "catalysts for the stock include an acceleration in active diner growth or take rate in 3Q14. In our view, its $36.86 share price adequately reflects our favorable opinion of GrubHub and its business model. We would be comfortable recommending their purchase if there was a pullback."

Forte commented that "the company is leading the way as consumers increasingly use their connected devices, including their smartphones, to order online from restaurants instead of calling in their orders and relying on physical menus. Today, only 5 percent of take- out orders are placed online."

"Investor sentiment is already favorable, which is reflected in the high multiples (shares currently trade at an 87.8x forward P/E ratio and 31.9x forward EV/EBITDA). However; we are not forecasting an acceleration, with pro forma active diner growth of 45.0 percent vs. 50.7 percent last quarter and a pro forma take rate of 12.0 percent vs. 14.2 percent last quarter," according to the report.

GrubHub Inc recently traded at $36.81, down 0.38 percent.